Gold Plunges After Historic $5,000 Peak as Markets Signal Deeper Unease

Just days after gold smashed through $5,000 for the first time in history, the precious metal crashed 2.8% on Friday, sending a chill through global markets already jittery about overvalued stocks and mounting geopolitical risks.

Asian Markets Paint Mixed Picture

Asian markets reflected the underlying uncertainty. Tokyo's Nikkei 225 edged up 0.2%, but AI-related stocks took a beating. Semiconductor testing giant Advantest plunged 4.8% while chip equipment maker Disco Corp fell 1.9%.

Meanwhile, South Korea's Kospi defied gravity, climbing 0.9% to yet another record high. Samsung Electronics gained 1.7% and memory chipmaker SK Hynix surged 6.7%. The divergence between Japanese and Korean tech stocks highlights how differently investors are pricing similar assets.

China's markets retreated across the board, with the Shanghai Composite down 0.5% and Hong Kong's Hang Seng falling 1.7%. In an unusual twist, Indonesia's stock exchange gained 1.2% after CEO Imam Rachman resigned, citing "commitment toward recent market conditions." The exchange had been trading at all-time highs before MSCI warned about transparency risks.

Microsoft's Reality Check

The gold selloff came after a wild day on Wall Street that saw Microsoft crash 10% despite beating earnings expectations. It was the tech giant's worst day since the COVID-19 market meltdown in 2020, suggesting investors are no longer willing to pay premium prices even for solid results.

The contrast was stark: Meta Platforms soared 10.4% after reporting strong profits, even as it promised to continue massive AI investments. IBM jumped 5.1% and Southwest Airlines flew 18.7% higher on optimistic 2026 forecasts.

This selectivity marks a shift from the "buy everything tech" mentality that drove markets to record highs. Companies now need to prove their growth stories, not just promise them.

The Safety Trade Unravels

Gold's dramatic reversal from near $5,600 to $5,205 reflects deeper anxieties about where to park money safely. The metal had nearly doubled over 12 months as investors fled to traditional havens amid concerns about expensive US stocks, political instability, tariff threats, and government debt loads worldwide.

Silver joined the retreat, falling 4.1% to $110.41. Even the dollar, which had weakened significantly over the past year due to similar risk factors, managed a modest recovery against the yen.

Oil prices also gave back gains, falling after surging over 3% Thursday on US-Iran tensions. Defense Secretary Pete Hegseth's warning that the military "will be prepared to deliver whatever the president expects" was followed by Trump's offer for Iran to "make a deal" on its nuclear program, whipsawing energy markets.

The answer may depend on whether companies can prove their sky-high valuations with concrete results—and whether geopolitical tensions escalate or ease in the coming weeks.